Buffalo, NY (WBEN) After a series of vehicle thefts spurred by the much-talked-about Tik Tok challenge, some auto insurance companies are reportedly turning down coverage to owners of Kia and Hyundai vehicles.
There are reports Progressive and State Farm have temporarily stopped writing new business in some states for certain models of the Hyundai and Kia vehicles, because losses for these vehicles have increased radically.
Lorette Worters of the Insurance Information Institute says the Tik Tok challenge on how to steal the cars has exacerbated the thefts. "It's all about managing risk," says Worters. "The impact of these excess of claims costs are impacting customers, and if they can necessarily take action to protect policyholders and businesses because these claim frequencies have continued to grow and what was initially a problem and just Colorado, and Wisconsin has now expanded to most states." Worters notes for the first half of 2022, for example, the claim frequency of the 2015-19 Hyundai and Kia vehicles are three times higher than the first half of 2020.
Worters says customers can shop around look at what different insurers are offering based on what their risk level is. "It's a competitive business. Insurance companies are going to really want to take on new business and increase their market share. It's something that they're just gonna have to look and see what's available for them," explains Worters.
Locally, Craig Willoughby of Willoughby Insurance handles Progressive but not State Farm. He says he's not hearing that issue here. "This is not even a blip on their radar," says Willoughby. "They're not doing anything different because of Kia challenges on Tik Tok, it has no effect on them whatsoever." Willoughby says if people aren't getting turned down, it might be because they're standalone it might because they've had too many claims or too many losses.
He says insurance companies are looking at other triggers. "It used to be you could have three claims. Now you can only have one claim or no claims. It used to be good to have just one car quote insured. Now they want at least two because the cost of repair," adds Willoughby. He notes that will soften up eventually when the recession comes or when the market readjusts and settles down.
